Dodoma — THE government announced several new taxes on Thursday and raised excise duty for various items including beer, soft drinks, spirits and tobacco products.
The Minister for Finance and Economic Affairs, Dr William Mgimwa, told the National Assembly that the government plans to spend 15.1tri/- during the 2012/14 fiscal year.
He said 10.5tri/- would be spent on recurrent votes, while 4.527tri/- would be invested in development projects.
The Minister pointed out that 8.714tri/- would be raised by the government from local sources and 8.07tri/- would be raised from tax revenue, while 644.58bn/- would come from non-tax sources.
He said local government authorities are expected to raise 362.2bn/- and development partners through general budget support will shunt in 842.4bn/- foreign loans and grants including the Millennium Challenge Account (2.3tri/-), while 1.6tri/- will come from domestic borrowing.
The minister further said that a further 1.2tri/- would be secured through non-concessional borrowing. Dr Mgimwa said the 2012/13 government budget was intending to increase economic growth under the second phase of the National Strategy for Growth and Reduction of Poverty, popularly known as Mkukuta II.
He said the government has reduced exemptions for various beneficiaries. He said 10 per cent value added tax (VAT) was being introduced for those who were formerly being exempted. Dr Mgimwa said to encourage traders to pay tax timely VAT was being exempted on electronic fiscal devices. He said to encourage use of natural gas VAT was being exempted on natural gas.
The minister further said to ensure level playing field locally produced juice would be charged excise duty at the rate of 8/- per litre, while imported juice the charge is 83/- per litre. He said traders earning less that 3m/- turnover annually would not be charged income tax.
The budget has also given relief to employees, where the pay as you earn (PAYE) threshhold has gone up to 170,000/- from 135,000/-. The minister announced abolition of excise duty on heavy fuel oil (HFO), saying the move was aimed at reducing production costs in the country.
Dr Mgimwa noted that to protect artistes from piracy, excise duty was being introduced on music and film products such as DVD, VCD, CDs. The minister said in a move to protect the environment, people importing cars manufactured over eight years ago would be charged 20 per cent VAT.
Exemption has also been abolished on imported non-utility motor vehicles for all beneficiaries, but diplomats, diplomatic missions; religious organizations would continue to enjoy the benefit. Excise duty on soda has gone up from 69/- per litre to 84/-, for wine made from local grapes, excise duty was being reduced from 420/- per litre to 145/- in a move to encourage cultivation of vines and local production of wine.
Excise duty for spirits has gone up from 1,993/- per litre to 2,392/-, while the duty for local beer is up from 248/- per litre to 310/-; foreign beer excise duty is up from 420 per litre to 525/-. Smokers have also not been spared as excise duty on cigarettes without filter tip and containing domestic tobacco of more than 75 per cent is up from 6,820/- to 8,210/- per thousand cigarettes.
Exise duty on other cigarettes has gone up from 29,264/- to 35,117/- per thousands sticks. Excise duty on airtime is up from 10 per cent to 12 per cent. Export Levy on raw hides would go up from 400/- to 900/- per kilogramme.
The minister said the move was aimed at discouraging export of raw hide to encourage local production of shoes and other leather products. Gaming Tax for Casino has gone up from 13 per cent of gross gaming revenue to 15 per cent.
The minister also announced introduction of gaming tax on sports betting introduced at the rate of six per cent of the total stakes. He also announced introduction of gaming tax on SMS lotteries at a rate of 43 per cent and gaming tax of 15 per cent on Internet Casino.
He announced introduction of personalized plate numbers for which the government would charge at 5m/- for three years. Airport service charges are also up from $30 to $40 for foreign travels, while local travel charge is up from 5,000/- to 10,000/-.